In re Chris-Don, Inc.
United States District Court for the District of New Jersey
367 F. Supp. 2d 696 (2005)
Relevant factsFree
Chris-Don (debtor), a tavern operating under a New Jersey alcoholic beverage license, borrowed $300,000 from United (creditor), granting United a security interest in its assets including intangibles. After Chris-Don's bankruptcy, the trustee sold the liquor license, and United claimed entitlement to the sale proceeds despite New Jersey's Alcoholic Beverage Control Law barring such licenses from being used as collateral. The bankruptcy court granted United summary judgment, and the trustee appealed.
IssueFree
Whether debtors can grant security rights in intangibles that are property if contract provisions or state laws attempt to restrict such grants.
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